Sprint and Nextel enter merger talks

Dec 09 2004 - 04:26 PM ET | Cingular, Nextel, Rumor
sprint nextel merger Breaking news: According [paid subscription req.] to the Wall Street Journal, Sprint and Nextel have entered merger negotiations. The merger would treat the two companies as equals. Sprint is the nation's third largest carrier while Nextel is the fifth (but most profitable thanks to higher revenue per customer). Sprint's landline phone business would also be included in the deal. MobileTracker will follow this rumor closely. Update: More information has been added to the WSJ story. Some facts and figures: * Deal would be valued north of $30 billion * Top three wireless carriers (Cingular, Verizon, Sprint/Nextel) would control 75% of US market * The new company would have 38.5 million customers * Both companies saw a boost in stock trading today: Nextel shares closed up 6.5% while Sprint shares closed up 8%. Update 2: The New York Times has a similar piece posted for tomorrow's paper. No paid subscription required. Many readers wrote in to MobileTracker asking about the network differences. There's no way around making customers of one company (most likely Nextel, the smaller company) new phones. bq. A deal would have its risks. Nextel's 15.3 million customers might need new handsets if the new company wants them all to be served by Sprint's CDMA (code division multiple access) technology. Plus, Nextel's push-to-talk service is somewhat unproven with CDMA. Because of the handset issue, both Motorola and Qualcomm are watching this deal closely. Motorola provides all of Nextel's iDEN phones, while Qualcomm makes the CDMA chips that Sprint phones use. T-Mobile is also keeping up-to-date on the proposed merger--it would become the smallest national carrier with 16 million customers--less than half the size of any of the competition.